Published by Kartik Subramaniam
Starting a career in real estate and obtaining your real estate licenseopens up a new world of opportunity to you.There are so many different career paths that can be taken one you get your real estate license.
While it’s true that most of our students start their career selling houses, commercial real estate (CRE) is also an option for you in California. There are similarities between both areas of practice as they involve helping clients buy, sell and lease property so the desired outcome is the same. The high level difference is that the clients to whom you provide services are simply looking at a different class of property.
A common misconception is that the commercial side of the business is somehow more complicated than residential but in many ways the opposite is true. Commercial files can be thinner because there are many forms and documents that are required in residential real estate that don’t exist in the commercial world.
In any case, if commercial is an area of specialization you find appealing,here are some things to consider and things you’ll need to do:
Every real estate agent, regardless of whether they plan to work in residential or commercial real estate, must meet specific criteria and pass an exam. Individual states set their own criteria, so be sure to research your state’s process. Generally speaking, you must meet eligibility requirements, take approved re-licensing real estate classes , and pass the real estate exam to obtain a license.
After you choose a real estate schooland receive your real estate salesperson license in California, you’ll have to place your license under a broker. Once you select a broker, the firm will dictate the type of real estate you can practice. If you want to pursue work in the CRE market you will have to find a broker that has the bandwidth and resources to conduct commercial sales and leasing. This is where it can get a little sticky because most residential firms don’t offer the tools neededto do commercial real estate and most commercial firms don’t offer the residential tools to sell a house.
Finding someone to mentor and train you to practice commercial real estate is not as easy as finding a residential mentor. Part of why this is true is that there are far more residential real estate agents than there are commercial ones and residential firms are typically more eager to hire than commercial ones.
There are large commercial companies like CB Richard Ellis and Jones Lang LaSalle that might hire you with the right resume and connections, or you can explore working at a more boutique local shop in your area. The key thing here is to find solid training and a mentorship program that will allow you to start your commercial real estate career properly.
Many residential real estate agents specialize in certain types of homes,such as retirement communities, townhouses, luxury homes, or another niche. The commercial real estate industry tends to be even more specialized than this.The commercial real estate world tends to be broken down into five pillars:
Retail - Shopping centers
Industrial - Warehouse type uses
Office - Larger or single tenant office spaces
Raw land - Developer specialization
Apartments/multi family sales - 5 or more apartment units
While there can be some cross-over between these two functions there is still a high level of specialization.
Not unlike residential real estate, you need to have marketing and branding strategies in your toolbox. In addition to the types of properties you want to specialize in, your plan should include factors such as how to target clients, budgets, unique selling points, and strategies to client outreach.
One of the benefits of working in the commercial real estate field is the ability to expand your practice. Besides an area of specialization, there are opportunities to participate in arranging financing for a property, performing property management, or (as mentioned above) negotiating tenant leases.
Just how wide of a net you can cast is going to be dependent on your brokerage and the services that they offer. If your brokerage doesn’t have a trust account and accounting systems created, you won’t be able to legally conduct property management so you’ll want to explain your aspirations to your broker and see if they have a system to support your endeavors.
Because sales prices are generally higher on commercial properties than residential ones commercial agents often find they can earn larger commissions, which can equate to higher annual earnings. Many agents who specialize in this area find it to be a lucrative, exciting, and rewarding experience. It's important to know, success doesn't come overnight, it takes effort and experience. The large commercial deal sizes can have a negative impact on the commissioned real estate agent, however.If your entire earnings for the year are dependent on one large deal that ends up falling apart this can put you in a precarious position.
Nevertheless, if commercial real estate sounds appealing to you,you need to start with our real estate license course.Register today so we can help you prepare for a lucrative career in the commercial market.
Are you ready to get your real estate license?